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    CT SS For Student Apr2019

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    Nabila Rosmiza
    This document provides the suggested answers to students for a cost and management accounting exam. It includes answers to 3 questions. Question 1 covers identifying internal and external users of accounting information and their uses. Question 2 covers standard costing, variances, and a profit reconciliation statement. Question 3 covers optimal production mix determination based on material, labor, and overhead considerations. The optimal mix maximizes contribution and net profit.

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    CT SS For Student Apr2019

    Uploaded by

    Nabila Rosmiza
    119 views5 pages
    This document provides the suggested answers to students for a cost and management accounting exam. It includes answers to 3 questions. Question 1 covers identifying internal and external users of accounting information and their uses. Question 2 covers standard costing, variances, and a profit reconciliation statement. Question 3 covers optimal production mix determination based on material, labor, and overhead considerations. The optimal mix maximizes contribution and net profit.

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    MAF251 CT SOLUTION APRIL 2019

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    CT SS for student Apr2019

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    This document provides the suggested answers to students for a cost and management accounting exam. It includes answers to 3 questions. Question 1 covers identifying internal and external users of accounting information and their uses. Question 2 covers standard costing, variances, and a profit reconciliation statement. Question 3 covers optimal production mix determination based on material, labor, and overhead considerations. The optimal mix maximizes contribution and net profit.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    119 views5 pages

    CT SS For Student Apr2019

    Uploaded by

    Nabila Rosmiza
    This document provides the suggested answers to students for a cost and management accounting exam. It includes answers to 3 questions. Question 1 covers identifying internal and external users of accounting information and their uses. Question 2 covers standard costing, variances, and a profit reconciliation statement. Question 3 covers optimal production mix determination based on material, labor, and overhead considerations. The optimal mix maximizes contribution and net profit.

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    © All Rights Reserved
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    of 5

    CONFIDENTIAL 1 AC/COMMON TEST APR 2019/MAF251

    UNIVERSITI TEKNOLOGI MARA


    COMMON TEST
    SUGGESTED ANSWER FOR STUDENTS

    COURSE : COST AND MANAGEMENT ACCOUNTING

    COURSE CODE : MAF251

    EXAMINATION : APRIL 2019


    TIME : 1 1/2 HOURS
    CONFIDENTIAL 2 AC/COMMON TEST APR 2019/MAF251

    QUESTION 1

    A (a) Identify the above users of accounting information whether they are internal or external
    users.
    i. Inland Revenue Board – External user
    ii. Financial Controller – Internal user
    iii. Production Manager – Internal user
    iv. Loan provider – External user

    b. Give ONE (1) use of information to the above users.

    i. Inland Revenue Board – To impose tax based on the company’s performance


    ii. Financial Controller – To decide the need for cash flows to support the operations
    iii. Production Manager – To decide whether to provide new production facilities
    iv. Loan provider – To evaluate the creditworthiness of the company

    B. Briefly explain FOUR (4) roles of management accounting.

    Planning MA assist management in establishing short term and long-


    term goals and objectives, as well as formulate various
    strategies in achieving them.
    Controlling MA ensures operations are carried out according to plan and
    identifies any corrective action required.
    Organizing MA allows management to organize the resources effectively
    by incorporating all useful information for operation.
    Performance MA provides measurable targets that can be used to measure the
    evaluation performance of operating units as well as the organization.
    Directing MA gives direction as to what are expected to be done by all levels
    according to the formulated strategies.
    CONFIDENTIAL 3 AC/COMMON TEST APR 2019/MAF251

    QUESTION 2

    a) Standard Cost Card:


    RM
    Direct material 1 kg X RM20/kg 20.00
    Direct labour 1.5 hrs X RM10/hour 15.00
    Variable overhead 1.5 hrs X RM6/hour 9.00
    Fixed overhead RM4 X 1 unit 4.00
    Standard production cost 48.00
    Standard profit 12.00
    Standard selling price 60.00

    b)
    i. DMPV = (SP –AP) AQ DMUV = [(SQ x actual prod) – AQ] SP
    = (RM20 – RM22) 25,000 kg = [(1 x 22,000) – 25,000 ] RM20
    = 50,000 (A) = (22,000 - 25,000) RM20
    = 60,000 (A)

    ii. DLRV = (SR –AR) AH DLEV = [(SH x actual prod) – AH)] SR


    = (RM10 – RM8) 30,000 = [(1.5 x 22,000) – 30,000 ]10
    = 60,000 (F) = (33,000 – 30,000) x RM10
    = 30,000 (F)
    iii. VOH. (SVOAR X AH) - AVOH VOH efficiency = [(SH x actual prod) – AH)] SVOAR
    expenditure = (RM6 x 30,000) – 240,000 = [(1.5 X 22,000) – 30,000]
    = 180,000 – 240,000 = (33,000 – 30,000) x RM6
    = 60,000 (A) = 18,000 (F)

    iv. FOH. = BFOH - AFOH FOH Volume = (BQ - AQ) SFOAR


    expenditure = 80,000 - 88,000 = (20,000 – 22,000) RM4
    = 8,000 (A) = 8,000 (F)

    v. SMPV = (SM –AM) AQ SMVV = (BQ – AQ) SM


    = [(60 – 48) – (65 – 48)] 22,000 = (20,000 – 22,000) RM12
    = (12 -17) 22,000 = 24,000 (F)
    = 110,000 (F)
    CONFIDENTIAL 4 AC/COMMON TEST APR 2019/MAF251

    c) Profit Reconciliation Statement


    RM RM RM
    Budgeted profit (RM12 x 20,000) 240,000
    Sales variances:
    Sales margin price 110,000(F)
    Sales margin volume 24,000 (F) 134,000(F)
    374,000
    Cost variances: Favourable Adverse
    Direct material price 50,000
    Direct material usage 60,000
    Direct labour rate 60,000
    Direct labour efficiency 30,000
    VOH expenditure 60,000
    VOH efficiency 18,000
    FOH expenditure 8,000
    FOF volume 8,000
    116,000 178,000 62,000(A)
    Actual profit 312,000

    d) Reason for the following variances:


    i. Adverse material usage variance
    - Buying low quality material
    - Excessive waste in the use of material
    - Theft of material

    ii. Favourable labour efficiency variance


    - Highly skilled labor
    - Output produced is quicker than expected (due to the motivation of the
    workers)
    CONFIDENTIAL 5 AC/COMMON TEST APR 2019/MAF251

    QUESTION 3
    a. Excess/shortage of direct material and direct labour
    Product Demand Direct material Direct labour
    (sets) Per unit Total Per unit Total
    Exclusive Set 8,750 2 17,500 1.5 13,125
    Elegant Set 6,200 3 18,600 1.3 8,060
    Stylish Set 8,250 2.4 19,800 1.8 14,850
    Total Required 55,900 36,035
    Total Available 56,000 30,640
    Excess 100 Shortage 5,395

    b. The most optimal mix of products


    Exclusive Set Elegant Set Stylish Set
    Selling price 150.00 170.00 170.00
    Less: Variable Cost
    Direct material 50.00 75.00 60.00
    Direct labour 30.00 26.00 36.00
    Variable prod overhead** 32.75 38.75 34.50
    Salesman commission 15.00 17.00 17.00
    Contribution margin per unit 22.25 13.25 22.50
    Limiting factor (DLH) per unit 1.5 hr 1.3 hr 1.8 hr
    Contribution per DLH 14.83 10.19 12.50
    Ranking 1 3 2

    Exclusive Set Elegant Set Stylish Set


    Production overhead 51.50 55.00 57.00
    Fixed production overhead *12.50 x 1.5 12.50 x 1.3 12.50 x 1.8
    Variable production overhead 32.75 38.75 34.50
    *Fixed production OAR = 383,000 / 30,640 = 12.50 / hour
    **30,640
    LF (DLH/unit) Demand Hours Required Balance available
    Exclusive Set 1.5 8,750 13,125 17,515
    Stylish Set 1.8 8,250 14,850 2,665
    Elegant Set 1.3 2,050 8,060 -

    c. Total net profit


    Product Units CMU Total
    Exclusive Set 8,750 22.25 194,687.50
    Stylish Set 8,250 22.5 185,625.00
    Elegant Set 2,050 13.25 27,162.50
    Total contribution 407,475
    Fixed overheads (383,000 + 12,000) 395,000
    Net profit 12,475
    END OF SUGGESTED SOLUTION

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